Global Macro

This infographic traces the origin of the money system depicting early coins that were used in various eras ultimately leading to the introduction of paper money, known as “fiat” currency. Fiat currency, though declared by a government to be legal tender is not backed by a valuable commodity. Because of this very fact, fiat currency has repeatedly collapsed down through the ages. Are we headed for another collapse? If so, do you know how to invest in a fiat currency environment? This infographic takes you through the journey.

The old nursery rhyme still holds true today. Money still makes the mare go. The story of money goes even further back. In fact, the tradition of money goes back around 3000 years, before which a barter system was probably used.

An article published in a renowned daily suggested that equity market returns follow nominal GDP growth rates. The author appropriated, “The reason for this is simple. Equities over time grow in line with the growth of underlying businesses. As businesses comprise the economy, the nominal growth of the economy (real growth plus inflation) is a good proxy for the average growth in businesses. The Indian economy has grown at a remarkably constant nominal growth of 15% p.a. No wonder that the Sensex CAGR of 17.1% is close to 15% nominal GDP growth.” (Emphasis mine) Read More